The U.S. Federal Trade Commission (FTC) announced on Thursday that it has successfully secured a settlement that addresses antitrust concerns related to Intercontinental Exchange (NYSE:ICE), the owner of NYSE, and their proposed acquisition of data vendor Black Knight (NYSE:BKI).
Initially, the FTC had expressed apprehension that the $11.7 billion deal, which would merge the two leading mortgage technology providers, could potentially result in higher costs, reduced innovation, and restricted choices for lenders.
Henry Liu, the director of the FTC’s Bureau of Competition, stated, “To address these concerns, the Commission’s order provides structural relief and a variety of tools to preserve competition in these critical markets.”
Under President Joe Biden’s administration, U.S. antitrust regulators have taken a firm stance against corporate consolidation, engaging in battles against companies across various sectors, including airlines, technology, and finance.
The proposed settlement mandates that Black Knight divests itself of Empower and Optimal Blue, two businesses that play a crucial role in the mortgage origination process, as per the FTC’s announcement.
Constellation Software’s unit, Constellation Web Solutions, will assume control of these two entities.
Back in mid-July, Black Knight had already announced its intention to sell its Optimal Blue business for $700 million. Optimal Blue offers data and technology services for pricing and trading mortgages. The sale of the Empower loan origination system business had also been disclosed earlier.
In addition to the divestiture, the agreement with the FTC necessitates that ICE and Black Knight seek approval from the agency before repurchasing any divested assets or acquiring an interest in a loan origination system business over the next decade.
The FTC had initially initiated a lawsuit against the proposed deal, but this month, they moved to dismiss it as both parties aimed to negotiate a settlement.
The consent agreement will now undergo a public comment period before finalization.
